Task 301.1.3-04 Memo

656 Words3 Pages
May 8, 2013 To: Samuel Parker From: RE: Quality Costs This memo is in response to your request to identify, explain, and evaluate the three types of costs associated with quality management. I’ve provided three different sections that address your questions. Section A: Identify the three types of quality costs The three types of costs are appraisal costs, prevention costs, and failure costs. Section B: Explanation of each costs and examples The costs incurred to determine the degree of conformance to quality requirements are appraisal costs. Appraisal costs are used to evaluate and to ensure products and services conform to quality standards. These costs cover testing and inspections of products to find defective products or services during the various phases of production. These costs include paying inspectors, labs, testing equipment, quality audits, field testing, and product testing. Prevention costs reduce or prevent defects from occurring. These costs include training staff, the placement of quality control procedures, planning and administrations systems, and working with suppliers to provide quality supplies. Companies perform design experiments, test the reliability and engineering of a product, test production systems, and evaluate risk assessment. Process capability and process control are also included in the inspection, planning and other activities in manufacturing and service processes. Failure costs occur when parts or services are defective or faulty. These costs can be internal or external. Internal failures are failures that are discovered during the production process, and external failures are discovered by the customer. Both failures represent a loss in revenue. Internal failures can occur from defective material from suppliers, faulty equipment, employee carelessness, and improper handling procedures.
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